The representative work investment cost performance is more than 90% of the same kind, how does the "low-wave male god" Feng Hanjie do it?

2021 is an extraordinary year, A shares have been twisting and turning, and the difficulty of making money has increased significantly compared with the past two years. According to CCTV financial surveys, 53% of the basic people lost money last year, and the proportion of the basic people who made profits of more than 10% was only 11%. Entering 2022, the stock market volatility has become more intense, the net value of many equity funds has shrunk significantly, and many high-performing funds with leading performance last year have flipped over, allowing many investors to experience a "roller coaster".

In fact, behind the extreme returns often means extreme strategies, the back of the offensive strong, the price may be that the market goes out when the net value of the fund has to face a sharp drawdown, so the basic people in the pursuit of returns at the same time, it is best to pay attention to the volatility level of the fund. Especially investors who pursue steady returns, they should pay more attention to the holding experience of the fund and choose a fund that can make you "sleep peacefully at night". This is the case with products managed by Feng Hanjie, a high-performing fund manager in the active equity investment department of China Canada Fund.

Since Feng Hanjie took office as the manager of the China-Canada Transformation Power Hybrid A Fund on December 5, 2018, he has achieved positive returns in three full years, with net worth growth rates of 19.11%, 59.88% and 32.84% in 2019, 2020 and 2021, respectively, the maximum drawdown in the past year was 7.94%, exceeding 96% of the same kind, and the Sharpe ratio exceeded 91% of the same kind; its fixed income + representative work, Zhongjia Kefeng Value Selection, increased its net value in the past year by 7.03%, the maximum drawdown was only 1.4%, more than 89% Similarly, sharp ratio of more than 91% of the same kind (fund performance from the official website of China and Canada, benchmark from flush, the maximum drawdown, Sharpe ratio and ranking from Tianxiang Gu, data as of January 20, 2022).

Feng Hanjie has a master's degree in mathematics from Tsinghua University, and has been engaged in investment research for more than 12 years, successively working in Taikang Assets and China Europe Fund, covering macro strategies, cycle manufacturing and other industries and fields. As a value investor, he always adheres to the long-term profit of the enterprise, the whole market "turns the stone", selects individual stocks from the bottom up, does not hold the group, does not follow the trend, and is a stable style and trustworthy "long-distance runner".

How are value investors made?

In the first two years, the stock market structure was outstanding, and the overall performance of equity funds was excellent, with an average return of more than 35% for two consecutive years in 2019 and 2020. But "it's easy to make three times a year, and it's hard to double in three years." Profits in a year or two depend mostly on wind and luck, and to continue to obtain positive returns in three years, ten years, or even longer, it must be supported by values and methodologies.

Feng Hanjie is such a fund manager with firm values and mature methodology. His investment style is biased towards value, favoring bottom-up stock selection in the whole market, not making industry choices, and the formation of such an investment style has a lot to do with his personality and past investment and research experience. At the beginning of his career, he had been engaged in several years of strategic research, and the essence of strategy research was to tap the most suitable industry in the market, but Feng Hanjie found that he often could not grasp the industry in the market outlet, and in the long run, the accuracy rate of industry allocation was only about 50%, from which he concluded that the mainstream industry rotation strategy of the market was actually not suitable for himself.

"I found myself not suitable for trend investing, although I also hoped that the stocks I bought could rise and fall every day, but when I did that, I was losing money, and in the end I could only give up this unrealistic goal and choose a value investment with relatively little difficulty and relatively large certainty, just like Buffett said, 'Choose to get rich slowly'." Feng Hanjie said frankly.

Feng Hanjie's stock selection logic is actually not complicated, that is, from a long-term perspective, select enterprises with strong profitability, high profit quality and long-term competitiveness. "I will use the financial indicators in terms of profitability and profitability quality to conduct a preliminary screening, select 200-300 companies for in-depth research, and then select dozens of companies with long-term competitiveness to track."

In the three stock selection dimensions of "good industry, good company, and good price", he is most concerned about price, that is, the margin of safety. He believes that a long-term perspective is the key to defining a good industry and a good company, and the margin of safety is an element that cannot be ignored in value investment, because good price is an important guarantee for future earnings. "If good companies don't have good prices, it's hard to get a return, so I'll settle for a second-class business that is suboptimal but has better long-term returns."

The risk control of long-distance runners

In the past two years, the atmosphere of A-share track investment has become more and more intense, consumption, new energy, cycle and other tracks have risen one after another, under the extreme differentiation of the market, the wind of hugging the group is growing, Feng Hanjie has always adhered to his investment framework, insisted on bottom-up whole market stock selection, do not chase the outlet, do not hold the group, and will not bet on one or two tracks. He once said that the industry's outlet often changes, chasing the outlet, often high returns and high risk coexist, and the "top stocks" that are not in the industry outlet can provide a certain margin of safety by themselves, and can provide better returns in the long run.

In-depth analysis of Feng Hanjie's historical positions in the management fund is not difficult to find that his portfolio is relatively scattered, and individual stocks rarely come from the mainstream track. Taking the four quarters of 2021 as an example, the top ten heavy stocks are from 8 different industries, including cyclical stocks such as chemicals, coal, and steel, as well as midstream manufacturing industries such as machinery and equipment, as well as consumer stocks such as food and beverage, medicine and biology, and public utility stocks, with very dispersed positions and relatively balanced industries.

Feng Hanjie admitted that this is not deliberately done by him, but determined by his investment style. "I don't value the industry when I pick stocks, purely bottom-up stocks, and you may also see that my fund has a lot of cyclical stocks in its fourth quarter positions, but I buy these stocks not out of industry logic, but purely look at individual stocks." Of course, there are also some contrarian investment considerations, when the market is overheated, I will sell some stocks with high valuations; when the market is particularly cold and no one is optimistic, I will buy some long-term optimistic 'cold stocks' against the trend. ”

Feng Hanjie attaches great importance to the risk control of the portfolio, in his view, whether it is an equity fund, or a fixed income + product, risk management is very important, in addition to stock selection, he will also control the portfolio risk from the asset allocation level. For example, he will have reservations about position control, and once the market has a big turning point, he is willing to make position selection to avoid systemic risks.

Under such an investment and risk control concept, the funds managed by Feng Hanjie often show high investment cost performance. According to the data of Tianxiang Investment Advisory, as of January 20, 2022, its equity masterpieces, China-Canada Transformation Power Hybrid A and Fixed Income + Representative Works, Sino-Canadian Kefeng Value Selection, have invested more than 91% of similar products with an investment price performance ratio of more than 91% in the past year.

A shares are not currently risky, and they are optimistic about stable growth related sectors

Since the beginning of 2022, the adjustment of A-shares has continued, especially in the high-prosperity tracks such as new energy and military industry, there has been a relatively large correction, but the low-value sectors such as finance and real estate have risen against the trend, and the call for style conversion in the market has begun to rise again.

Feng Hanjie believes that since the fourth quarter of last year, the A-share concept plate rotation has obviously become more, the rotation speed is also accelerating, often a month, or even a week to change a concept, the market has a trend towards conceptual development, the market has become very scattered. This state of disorganization, historically, usually occurs when the market sentiment is very high, the high sentiment is extreme, and it is often difficult to continue later, and there is a high probability that there will be a reversal. And this year's macroeconomic downward pressure is relatively large, although the government will introduce a variety of cross-cycle, counter-cyclical adjustment policies, but the demand side and the economy is more relevant to the industry and sector prosperity is still suppressed to a certain extent.

He admitted that it is still difficult to predict which direction the structural market will develop, but it is relatively certain that the industries and sectors with high market attention, whether from the perspective of fundamental changes in trends or valuation levels, may be difficult to maintain high returns in the early stage. In contrast, more optimistic about the stable growth of related industries and sectors, if the steady growth is stronger than expected, the effect is better, these sectors may usher in the opportunity of valuation repair. From the medium- and long-term dimension of 5-10 years, the average return provided by the stock market in the future is still expected to remain at a level of about 10%.

Note: China-Canada Transformation Dynamic A was established on September 5, 2018, Feng Hanjie served as a fund manager since December 5, 2018, and the net value growth rate from its establishment to the end of 2018, 2019, 2020 and 2021 was 1.71%/32.84%/59.88%/19.11%, and the benchmark growth rate of the performance in the same period was -5.09%/21.41%/16.22%/-1.88%. Founded on July 22, 2020, the net value growth rate of 2020 and 2021 was 21.63% and 15.42%, respectively, and the benchmark yield of performance comparison in the same period was -1.36% and 9.59%, respectively. Founded on May 8, 2020, The net value growth rate of China Plus Kefeng Value Select Hybrid in 2020 and 2021 was 12.6% and 8.35%, respectively, and the benchmark growth rate of performance comparison in the same period was 10.16% and -0.38%. Founded on May 22, 2020, The net value growth rate of China-Canada Juqingdingkai Hybrid A in 2020 and 2021 was 15.4% and 9.32%, respectively, and the benchmark growth rate of performance comparison in the same period was 3.39% and 1.9%. Established on March 24, 2021, China Jiajulong Holding Period Hybrid A has a net value growth rate of 4.26% in 2021 and a benchmark growth rate of 2.85% for the same period. Founded on June 30, 2021, The Company's 1-year hybrid A has a net value growth rate of 2.77% in 2021 and a benchmark growth rate of 1.39% over the same period. Sino-Canadian Xili Return and Sino-Canadian Post-Benefit held for less than six months in one year are not shown. The above data comes from the regular performance report of the fund product.

Risk Warning: The above views only represent the personal opinions of the fund manager and do not represent the investment advice of China Canada Fund Management Co., Ltd., nor do they represent any investment advice. Funds are risky and investments need to be done with caution. This material is for promotional purposes only and is not intended as any legal document or legal commitment, past performance is not indicative of its future performance, and the performance of other funds managed by the Manager does not constitute a guarantee of the performance of the Fund. Product returns may be affected by the stock market, bond market, etc. There may be a risk of fluctuation, please pay attention to investors. The fund manager undertakes to manage and use the assets of the fund in good faith, diligence and due diligence, but does not guarantee that the fund will be profitable or guarantee a minimum return. The fund manager is currently based on the transformation momentum of China and Canada and the risk rating of China Canada Kefeng Value Selection. Before making investment decisions, investors should carefully read the fund's "Fund Contract" and "Prospectus" and other legal documents, and comprehensively select fund products that match their own risk tolerance according to the investment purpose, investment period, investment experience, asset status, etc. The specific evaluation results of the sales agency shall prevail, and the investor shall complete the matching test between the risk tolerance and the product risk in accordance with the requirements of the sales institution when purchasing the fund. The registration of the CSRC does not constitute a material judgment, recommendation or guarantee by the CSRC of the risks and returns of the fund. When investors make investments, they should strictly abide by the provisions of anti-money laundering laws and earnestly fulfill their anti-money laundering obligations.